Cowbell has raised $100 million to expand its AI-based cyber insurance
- ByStartupStory | March 15, 2022
Cybercrime is on the rise, and an insurance firm that has developed an artificial intelligence-based platform to help manage the risks associated with it has announced a large round of funding to match the demand. Cowbell Cyber, a full-stack insurance company that provides cyber insurance to SMEs, has raised $100 million in a Series B round, which it will use to expand its go-to-market channels and invest in data science and “risk engineering,” as well as underwriting technology, claims management, and Cowbell Re, its reinsurance business.
The Pleasanton-based firm isn’t saying how much it’s worth, how many clients it has, or how much money it’s making right now. However, Jack Kudale, the company’s founder and CEO, stated that it expects its policyholder base to triple in the next year, to 35,000-40,000 customers (equivalent to around 17k-20k businesses now), and that its premium run rate (the insurance industry’s revenue run rate equivalent) has increased 40 times this year to $200 million, in what is still a very nascent market, with less than 10% of small businesses in the country currently taking out commercial insurance.
The technical approach is fascinating because it is at the core of big data analytics, the concept of “tech” in the category of “insuretech,” and it also taps into a larger trend I’ve noticed among insurance companies in general, where they appear to be just as focused on providing tools for risk mitigation as they are on snagging customers and getting them into regular premium payment cycles.
Cowbell’s technology is a vast data intake operation that watches around 71 per cent of the enterprises in the US market, or 23 million organizations, in order to figure out wider trends in consumption and SMB behaviour, spanning 1,000 data points. This feeds into a larger algorithmic evaluation framework dubbed Cowbell Factors by the company. In addition, it conducts monitoring analyses of its clients in order to determine their risk profiles.
Cowbell estimates that “in-force premiums” for cyber insurance in the United States will reach $100 billion by 2030, a figure that includes both huge corporations and small businesses, which is one reason why investors are interested.
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